There are still riches to be made from medical cannabis. Maryland showed it this month by smashing annual estimates for sales. And a New York company just made almost $50 million by selling its license before ever selling any actual marijuana.
Recreational legalization has been dominating news about cannabis. And that’s understandable.
It’s an exciting time in the legal cannabis industry. Ten states plus the District of Columbia have legalized recreational marijuana for adults. That number will exceed a dozen states in 2019.
The recreational market in just New Jersey, which should have its law signed by the governor by the end of this year, could be worth as much as $800 million.
The estimated prize in New York, which will follow right behind New Jersey, is an even bigger one, at $2.8 billion.
It’s no wonder that states are looking to join the list.
Consider that sales in Massachusetts topped $2.2 million in just the first five days since the legal recreational market opened recently, the Cannabis Control Commission of Massachusetts confirmed this week.
And all those sales dollars came from only two stores.
With this kind of money at stake, it’s no wonder that more states are actively looking to join the list.
But with all this new potential, sharp investors like us should not fall for a common trap: tunnel vision.
That’s because there is opportunity, right now, if you look this way…
Keep Lucrative Medicinal Cannabis Business Out of Your Blind Spots
Many an opportunity has been missed because investors, even successful ones, get preoccupied with just one area of an emerging industry.
I say this because now is not the time to fall asleep on medicinal cannabis. There are still riches to be made from this field.
The numbers don’t lie.
Let’s take a look at Maryland. At the beginning of the year, Beau Whitney, senior economist for New Frontier Data, put his estimate of the state’s medical sales for 2018 at $46 million.
By October, the state saw $67 million in sales, and Whitney had to update his annual forecast to over $100 million. That’s 117% above forecast. And that’s in a state that admitted the rollout of its program was not nearly as smooth as lawmakers originally envisioned.
Importantly, these big numbers are not about “potential” and are not waiting for a newly approved market to work out regulations. This money is coming in right now – and the companies with products in medical-only dispensaries are making a fortune.
Moreover, Maryland is by no means a one-off as far as putting up a big number or soaring past predictions.
Data collected by New Frontier show the following medical sales for 2017 alone:
- Oregon: $275.4 million
- Arizona: $406.7 million
- Colorado: $437.6 million
- Michigan: $633.1 million
- California: $2.75 billion
And that’s with three of those already having recreational marijuana sales programs in place. Those numbers will only get bigger when we look back at 2018.
But you and I shouldn’t be surprised by this, because we’ve been paying attention.
Many more states are testing the waters with medical cannabis. Missouri, Oklahoma, and Utah just joined the list of states with legalized medical marijuana in recent months, growing the total to 33 states.
Even in states where recreational cannabis has been approved or is on the cusp of happening, medical continues to expand. Look at legislation like “Jake’s Law” in New Jersey, named for a seven-year-old boy who died from brain cancer in January. Jake’s parents gave him CBD oil but were forced to use it sparingly because of restrictions the state had set on purchase amounts. This new law would ease those restrictions, opening up a lot more potential users.
And as we celebrate the legalization of recreational cannabis in Michigan by a midterm ballot measure and look toward a potential $425 million market there, we do not want to miss the medical expansion in that state. On Tuesday, Michigan lawmakers approved a new provision that allows dispensaries to deliver cannabis to cardholders.
Savvy investors like us see the profits that are there for the taking – right now.
Just take a look at NYCanna, a New York-based startup that gained a lucrative state license to sell medicinal cannabis. Less than a year after gaining that license – before NYCanna made a single retail sale – the founders flipped the company for $48 million. The license alone was just that valuable.
The power of medical marijuana isn’t confined to the United States alone either…
World Medical Marijuana Market Heading North of $55 Billion
North America represents the largest market for cannabis, but as we keep medical cannabis out of our blind spots in the U.S., we must also pay attention to the expanding international markets.
Earlier this week, South Korea became the first country to pass medical cannabis legislation in East Asia. The country could begin importing products in the first half of 2019. According to Vijay Sappani, CEO of a Toronto-based venture capital firm called Ela Capital, “South Korea legalizing medical cannabis… represents a significant breakthrough for the global cannabis industry.”
Thailand is hoping to beat South Korea to market and become the first Asian country to legalize medical cannabis. Jet Sirathraanon, the public health committee chair of Thailand’s National Legislative Assembly, believes the economic opportunity here would be “an opportunity for Thai people.” And he wasn’t shy about claiming the country – which was among the largest exporters of cannabis in the 1980s – grows “the best marijuana in the world.”
The countries would join a growing number of nations with legal medical markets, including Canada, Israel, Germany, and Australia. Data from Grand View Research predict the global medical market could reach $55.8 billion by 2025.
Eventually, recreational cannabis will be the biggest slice of the pie – but if you fall asleep on medical, you stand to miss out on a fortune.
Thanks for being an important part of the National Institute for Cannabis Investors,
Executive Director, National Institute for Cannabis Investors
November 29 2018